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Google: If We Own the Browser, We Own Search

Chrome may be free, but it is critical to the company's future.

During its quarterly earnings call, Google(Nasdaq: GOOG) ended up in a open discussion about its key products. Chrome may be free, but it is critical to the company's future.

While Google is often accused of losing focus, the company is scatter-shooting to find technologies that dramatically increase its core business: Search. According to Google, Chrome has only one purpose -- to lock users into Google Search on their desktops. According to the company, Chrome now has 120 million daily users -- 40% more than just one year ago.

Google has started an aggressive battle against its rivals to quickly gain market share for Chrome, which has raised eyebrows and concerns about the cost involved to provide a free product -- especially since the new Chrome-man-in-charge Sundar Pichai has been promised a rumored $30 -- $50 million pay package. However, Chrome has been built around search in a very effective way. Chief financial officer Patrick Pichette told analysts that Chrome has a "fantastic" opportunity once people are used to it: "Instead of looking for Google and looking for Search, the Omnibox gives them immediate access to Google Searches." He noted that this feature is, "in a strategic perspective," carried over to Chrome OS, which is really just a version of Chrome as far as the viewer can see it. "Everybody who uses Chrome OS is a guaranteed locked in user for us in terms of having access to Google."

There is plenty of reason for Google to heavily invest in Chrome and gain market share. From this perspective, there is equally enough reason for Microsoft to keep Google from gaining Chrome market share as a result. Mozilla is in a similar dilemma as it received advertising revenue through the usage of Firefox. Google is unlikely to slow down in this field as Pichette described Chrome (as well as Android) as the next billion-dollar businesses. There is common sense behind the assumption that Chrome OS devices will be accelerating Chrome adoption, depending on how successful Chrome OS will be, as the OS is shutting out rival search engines and advertising networks. We aren't quite sure how this strategy will sit with antitrust authorities as Microsoft's decision to make IE the default, locked-in browser in Windows in the late 1990s ended up in a spectacular trial that almost resulted in a break-up of Microsoft. But what do you do in a scenario when the OS is the browser, and you simply can't remove it?

Google's chief business officer Nikesh Arora provided some ideas as to how Google intends to be marketing Chrome. Apparently, Google has found that organic adoption as well as its ongoing marketing efforts work best. He noted that Google is not interested in partnerships to promote Chrome as the return of traditional marketing seems to work better. "You can expect us to continue to drive Chrome strategically, because it has not just a Chrome-specific benefit for us, but it also impacts many of our other products that work as part of Chrome," Arora said. "So the lifetime value of a Chrome user is phenomenal."